Changes to the Fair Deal scheme aimed at reducing “the stress and uncertainty” experienced by farm and business owners will cost €10m a year.
Ministers have signed off on proposals that will cap the payments to be made by families when a person enters the care of a nursing home.
The long-awaited overhaul of the Fair Deal scheme has been broadly welcomed by farming groups in particular.
The current system sees farm families and small business owners required to set aside 7.5pc of the value of their land annually to fund a place in a nursing home.
Under a plan devised by Minister of State Jim Daly, this will be capped at three years in future.
However, there has been some criticism of the strict conditions being attached to the new rules.
The Irish Independent revealed yesterday that in order to qualify for the cap, young farmers will be tied to the land for at least six years.
In order to qualify for the new terms, the person entering a nursing home must appoint a successor who will sign a legally binding commitment to continue the family business.
As part of a commitment to the ‘clawback’ mechanism, the successor must consent to a charge being applied on land or property if they break the terms of the contract.
The move is being seen as a way to identify genuine cases of families who qualify and prevent heirs from cashing in on their inheritance.
However, it will prevent families who want to get the State subsidy from renting land to third parties.
Kerry TD Danny Healy-Rae told the Dáil small farmers and shop owners “have been waiting for a revised Fair Deal scheme for many years”.
But he criticised the limitations, saying they are “wrong”.
“The department is still insisting that 100pc of the value of the farm must be assessed for the Fair Deal scheme, as well as the family home, which is wrong.
“If a farmer gets sick or hurt, which is a possibility because of the type of physical work involved, the young person taking over must have been farming for three years and continue to farm for six years.
“What is going to happen when young children cannot take over the farm and a wife would have no other income if she did not rent the farm, for example? That is very wrong,” he said.
Mr Daly said the TD would be welcome to tease out his concerns as the legislation works its way through the Oireachtas.
But he added: “Deputy Healy-Rae should be under no illusions and this is a very good news story for rural Ireland, including small businesses and farmers.”
IFA president Joe Healy said the Government must make good on its promises. “It is important for farm families whose farm businesses are being made unviable for the next generation,” he said.
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